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Transnet blames weak economy on low wagon output

Black industrialists who were set up specifically to supply Transnet have been particularly hard hit by the plunge in orders from the parastatal

05 September 2017 - 11:24
Linda Ensor

Picture: TRANSNET

The economic downturn has had a dramatic effect on Transnet’s wagon-procurement programme, with ripple effects on component manufacturers.

Black industrialists who were set up specifically to supply Transnet have been hit particularly hard by the plunge in orders from the parastatal.

Transnet Engineering CEO Thamsanqa Jiyane told Parliament’s trade and industry committee on Tuesday that in the 2016-17 financial year, only 100 wagons had been built, compared with the 4,119 that had been originally targeted.

The previous year only 2,100 wagons were manufactured compared with the 3,692 wagons projected.

Jiyane explained that Transnet Engineering only entered into wagon-building contracts when this was preceded by demand.

As the economy slumped, the demand for cargo transport had declined.

"The reduction in demand for wagons translated into low demand for the components related to these long-term contracts entered into," said Jiyane.

"This has negatively impacted on anticipated localisation deliverables," he said.

Transnet and the Passenger Rail Agency of SA were called before the committee to report on the localisation pertaining to the company’s major infrastructure investment projects.

Jiyane said that with regard to the acquisition programme for 1,064 locomotives, R4bn had been spent locally to date, compared to the R21.8bn target.

So far, 269 of the 1,064 locomotives had been accepted from two of the original equipment manufacturers at Koedoespoort in Pretoria.

ANC MP Adrian Williams said he was sceptical about the information provided as on-site visits undertaken by the committee indicated that no localisation was taking place.

"Quite frankly, I don’t believe you. I think you are coming here and talking nonsense," he said.